Book Keeping V/s Accounting

Basis	IFRS	GAAP
Acronym	International Financial Reporting Standard	Generally Accepted Accounting Principles
Meaning	International Financial Reporting Standards (IFRS) refer to an International Accounting Standards set of guidelines which states how business transactions and other activities are reported in financial statements. The International Accounting Standards Board (IASB) issues IFRS, and they shows how Accountants must report and maintain their accounts	The Generally Accepted Accounting Principles (GAAPs) are the accounting rules that are accepted by accountants based on which transactions are recorded in the books of accounts and financial statements are prepared. These rules or guidelines adopted for recording and reporting business transactions, in order to bring uniformity and consistency in the preparation and presentation of financial statements.
Basis	Principals based	Rule based
Scope	IFRS is used in more than 110 countries around the world, including the European Union and many Asian and South American Countries	GAAP is only used in United States
Concept	Based on Fair value Concept	Based on Historical Cost Concept
Income Statement	Extraordinary items are not segregated in the Income statement under IFRS.	Under GAAP, extraordinary items are shown below the net income.
Developed by	International Accounting Standard Board (IASB)	Financial Accounting Standard Board (FASB)
Treatment of Intangible Assets	Intangible assets are only recognized if they will have a future economic benefit, or they give a money value in future.	Intangible assets recognized at their current fair market value and no future considerations took place.
Treatment   of Inventory	LIFO (Last in First out) method of calculating inventory is not allowed	LIFO or FIFO (First In First Out) method method can be used for estimating inventory

Hey Guys,

Hope you are doing well, Most of us was confused in Book Keeping and Accounting, we think these terms are same, but this is a false statement. Both are the different terms but connected to each other. Today we discuss about both these terms and let's find out how they are different.

We Learn-

• Meaning and definition of Accounting
• Meaning and definition of Book Keeping
• Difference between Book Keeping and Accounting

→Meaning and definition of Accounting

• Accounting is the process of collecting, recording, classifying, summarising the financial transactions and events and communicate the final results to the users. 
• Accounting contains the full process of collecting the financial transactions, record those transactions, then classify and summarise the recorded transactions and after the interpretation of results communicate the final position to the users. 
• Accounting is an art of recording, classifying and summarising the financial transactions in a proper and significant manner and interpreting the results thereof.

→Meaning and Definition of Book Keeping

Book keeping is a part of accounting beacause it includes recording of financial transactions and events in a systematic manner in the books of accounts. Book keeping includes the below mentioned process:-

• Identifying financial transactions and events
• Measuring them in money terms
• Recording the identified financial transactions and events in the books of accounts
• Classifying recorded transactions and events

So, after understanding both the definitions we get to know these two terms are different from each other Accounting contains book keeping, but accounting is a wider concept than book keeping. Accounting contains full procedure(beginning to result) while book keeping only work till posting the transactions into accounts. Without Book keeping accounting is incomplete, accounting starts where book keeping ends. let's see the difference in detail as under:-

→Difference between Book Keeping and Accounting

Basis	Book keeping	Accounting
1. Scope	Book keeping is related to collecting the financial transactions, measuring them in terms of money, recording them in the books of accounts and classifying them.	Accounting starts where book keeping ends, accounting concerned with summarising the recorded transactions, analyse and interpret them and communicate the results to the users.
2. Stage	It is a primary stage and it is the base of accounting.	It is a secondary stage, it begins where book keeping ends.
3.Objective	Maintain proper and systematic records of financial transactions	Determine net profit and loss and ascertain financial position of business and communicate to the related parties about the position.
4. Nature        of Job	Book keeping is done at daily basis and it is routine in nature	Analytical and dynamic in nature
5. Level of Performance	Performed by Junior staff	Performed by senior staff

I hope you guys now understand the concept of Accounting and Book Keeping and able to differentiate between these. For any related queries stay tuned in comment section, Thanks.